BRAND COMMUNICATION

A STRATEGIC MARKETING APPROACH

GROWING AND SUSTAINING BRAND EQUITY• A Firm having developed a brand, now looks at how to create, maintain and

enhance brand equity under various situations and circumstances. • The branding strategy of a firm determines which brand elements a firm

chooses to apply across the products it offers for sale. • Branding strategy is critical because it is the means by which the firm can

help consumers understand its products and services and organize them in their mind.

• Many firms employ complex branding strategies. For example, brand names may consist of multiple brand name elements ( Toyota Camry V6 XLE ) and may be applied across a range of products ( Toyota cars and trucks).

• What is the best way to characterize a firm’s branding strategy under such instances and what guidelines exist to choose the right combinations of brand names and other brand elements, is the focus of our discussion.

STRATEGIC TOOLS• The brand – product matrix and the brand – hierarchy help to

characterize and formulate branding strategies by defining various relationships among brands and products.

• Brand Architecture: The brand architecture, for a firm tells marketers which brand names, logos, symbols and so forth to apply to which new and existing products.

• We often distinguish branding strategies by whether a firm is or should be employing an umbrella corporate or family brand for all of its products ( as a “branded house”, or a collection of individual brands all with different names ( as a “house of brands”).

• Brand architecture defines both boundaries and complexity. Which different products should share the same name? How many variations of the brand name should we employ?

Contd……• The role of defining branding strategies and brand architecture is two - fold :• 1. Clarify -- Brand Awareness: Improve consumer understanding and

communicate similarity and differences between individual products. • 2. Motivate – Brand Image: Maximize transfer of equity to/from the brand to

individual products to improve trial and repeat purchase. • The Brand – Product Matrix: • To characterize the product and branding strategy of a firm, one useful tool is

the brand-product matrix. It is a graphical representation of all the brands and products sold by the firm.

• The matrix (or grid) has the brands of a firm as rows and the corresponding products as columns.

• The rows of the matrix represent brand – product relationships and capture the brand extension strategy of the firm in terms of the number and nature of products sold under the firm’s different brands.

Contd….• A brand line consists of all products – original as well as line and category extensions

– sold under a particular brand. Thus, a brand line is one row of the matrix. • We want to judge a potential new product extension for a brand on how effectively it

leverages existing brand equity from the parent brand to the new product, as well as how effectively the extension, in turn, contributes to the equity of the parent brand.

• The columns of the matrix represent product – brand relationships and capture the brand portfolio strategy in terms of the number and nature of brands to be marketed in each category.

• The brand portfolio is the set of all brands and brand lines that a particular firm offers for sale to buyers in a particular category.

• A product line is a group of products within a particular category that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same type of outlets, or fall within given price ranges.

Contd….• A product line may include different brands, or a single family brand or

individual brand that has been line extended. • A product mix (or product assortment) is the set of all product lines and

items that a particular seller makes available to buyers. • A brand mix (or brand assortment) is the set of all brand lines that a

particular seller makes available to buyers.

• The BREADTH And DEPTH of a branding strategy describes the number and nature of different products linked to the brands sold by a firm.

• The firm has to make strategic decisions about how many different product lines it should carry ( the breadth of the product mix), as well as how many variants to offer in each product line ( the depth of the product mix).

Contd…..• The main reasons for a firm to have multiple brands in the same category is to

ensure broad market coverage. By adopting multiple brands, the firm is able to pursue different price segments, different channels of distribution and different geographic boundaries.

• Many firms have to introduce multiple brands because no one brand is viewed equally favourably by all the different market segments the firm would like to target.

• Other reasons include:• - To increase shelf presence and retailer dependence in the store• - To attract consumers seeking variety who may otherwise switch to another

brand• - To increase internal competition within the firm• To yield economies of scale in advertising, sales, merchandising and physical

distribution.

Contd…..• In designing the optimal brand portfolio, marketers generally need to trade off

market coverage and these other considerations with costs and profitability. • Brand lines with poorly differentiated brands are likely to be characterized by

much cannibalization and require appropriate pruning. • The basic principle in designing a brand portfolio is to maximize market

coverage so that no potential customers are being ignored, but minimize brand overlap so that brands aren’t competing among themselves to gain customer’s approval. Each brand should have a distinct target market and positioning.

• Roles of a Brand as part of a brand portfolio • Flanker: These are ‘protective’ or ‘fighter’ brands. • The purpose of flanker brands is to create stronger points of parity with

competitor’s brands so that more important ( and more profitable) flagship brands can retain their desired positioning.

Roles of Brands• Many firms are introducing discount brands as flankers to better compete

with store brands and private labels and protect their higher priced companions.

• While designing flanker brands, firms must be careful. The flankers should not be so attractive that they take sales away from their higher priced companion brands. On the other hand, they should NOT be designed so cheaply that they reflect poorly on these other brands.

• Cash Cows: Some brands may be retained despite dwindling sales because they still manage to hold on to a sufficient number of customers and maintain their profitability with virtually no marketing support.

• Low –end Entry Level or High-end Prestige Brands: Many brands introduce line extensions or brand variants in a certain product category that vary in price and quality.

Brand Hierarchy• A brand hierarchy is a useful means of graphically portraying a firm’s

branding strategy by displaying the number and nature of common and distinctive brand elements across the firm’s products, revealing the explicit ordering of brand elements.

• The highest level of the hierarchy technically always consists of one brand – the corporate or company brand.

• At the next –lower level, a family brand is used in more than one product category but is not necessarily the name of the firm. (eg. Tropicana and Lays)

• An individual brand is a brand restricted to essentially one product category, although it may be used for several different product types within that category.

• A modifier is a means to designate a specific item or model type or a particular version or configuration of the product.

Designing a Branding Strategy• Corporate objectives, consumer behaviour or competitive activity may sometimes

dictate significant deviations in branding strategy and the way the brand hierarchy is organized for different products or different markets.

• Thus the brand hierarchy may not be symmetric. Brand elements may receive more or less emphasis, or not be present at all, depending on the particular products and markets.

• Brand elements at each level of the hierarchy may contribute to brand equity through their ability to create awareness as well as foster strong, favorable and unique brand associations and positive responses.

• Therefore, the challenge in setting up the brand hierarchy and arriving at a branding strategy is to:

• (1) design the proper brand hierarchy with the right number and nature of brand elements to use at each level, and

• (2) design the optimal supporting marketing program to create the desired amount of brand awareness and type of brand associations at each level.

Contd…..• Specifically the marketers must decide: • 1. The number of levels of the hierarchy to use in general• 2. The desired brand awareness and image at each level• 3. Combinations of brand elements from different levels of the hierarchy, if any,

for any one particular product. • 4. How any one brand element is linked, if at all, to multiple products.

• The practice of combining an existing brand with a new brand is called sub-branding because the subordinate brand is a means of modifying the superordinate brand.

• For example, ThinkPad was a sub-brand to the IBM name, and T42 was a second-level sub-brand to further modify the meaning of the product.

• A sub-brand, or hybrid-branding strategy can also allow for the creation of specific brand beliefs.

Contd….

• The principle of simplicity is based on the need to provide the right amount of branding information to consumers.

• The principle of relevance is based on the advantages of efficiency and economy.

• The principle of differentiation is based on the disadvantages of redundancy. Marketers should distinguish brands at the same level as much as possible.

• The principle of prominence states that the relative prominence of the brand elements determines which element or elements become the primary one(s) and which become the secondary one(s).

• The principle of commonality states that the more common brand elements products share, the stronger the linkages between the products.

Developing a Brand Architecture• In developing the optimal brand strategies, marketers must first define the relevant

customer segments. • Second, marketers must have well-defined brand positioning and equity in terms of

points of parity and points of difference. • The brand mantra can be crucial to help establish product boundaries or brand

“guard rails”. • Following are guidelines for developing brand architecture:• 1. Adopt a strong customer focus.• 2. Avoid over-branding.• 3. Establish rules and conventions and be disciplined.• 4. Create broad, robust brand platforms.• 5. Selectively employ sub-brands as a means of complementing and strengthening

brands.• 6. Selectively extend brands to establish new brand equity and enhance existing

brand equity.

NEW PRODUCTS AND BRAND EXTENSIONS• When a firm introduces a new product, it has three choices for branding it: • 1. It can develop a new brand, individually chosen for the new product.• 2. It can apply, in some way, one of its existing brands.• 3. It can use a combination of a new brand and an existing brand.

• A brand extension occurs when a firm uses an established brand name to introduce a new product.

• When a new brand is combined with an existing brand, the brand extension can also be a sub-brand.

• An existing brand that gives birth to a brand extension is the parent brand. • If the parent brand is already associated with multiple brands through

brand extensions, then it may also be called a family brand.

Brand Extensions• Companies make brand extensions in the hope that the extensions will be able

to ride on the equity of the successful brands, and that the new brand will stand in its own right in the course of time.

• Brand extensions fall into two categories:• A) Line Extension: Marketers apply the parent brand to a new product that

targets a new market segment within a product category the parent brand currently serves.

• A line extension often adds a different flavour or ingredient variety, a different form or size, or a different application for the brand.

• E.g: Head and Shoulders Dry Scalp or Anti – Dandruff Shampoo. • B) Category Extension: Marketers apply the parent brand to enter a different

product category from the one it currently serves. • E.g: Havells adding Home appliances to its electrical products range.

A few successful Examples• 1. Lifebuoy has a number of extensions like Lifebuoy Plus, Lifebuoy Liquid

and Lifebuoy Gold. • 2. Amul initially launched milk powder. It had several category extensions

such as butter, cheese, cheese spread etc, and finally added ice cream, curd etc to its portfolio.

• An example of the extreme success of brand extensions is that of Classic Milds, a brand extension of the premium cigarette of ITC Ltd.

• It became such a success that it cannibalized the sales of its own mother brand. Today Classic Milds enjoys a much higher market share than Classic which has been relegated to the number two slot.

Advantages of Extensions• 1. Facilitates New Product Acceptance• 2. Improves brand Image• 3. Reduces Risk Perceived by Customers• 4. Increases the probability of gaining distribution and trial• 5. Reduces costs of Introductory and follow-up Marketing Programs• 6. Avoid Cost of Developing a New Brand• 7. Allow for Packaging and Labeling Efficiencies• 8. Enhance the Parent Brand Image• 9. Brings new customers into the brand franchise and increase market

coverage.• 10. Revitalize the brand• 11. Permit subsequent extensions.

Disadvantages• 1. Can confuse or frustrate consumers• 2. Can encounter retailer resistance• 3. Can fail and thereby hurt parent brand image• 4. Can succeed but cannibalize sales of parent brand• 5. Can succeed but diminish identification with any one category• 6. Can succeed but hurt the image of parent brand• 7. Can dilute brand meaning• 8. Can cause the company to forgo the chance to develop a new brand

• When extending a brand, a marketer should be extremely cautious that it does not go against the generic brand position, which is at the core or the heart of the brand’s image and equity.

Evaluating Brand Extension Opportunities• 1. Define Actual and Desired Consumer Knowledge about the brand:

• In order to uncover extension opportunities for a brand, the first step is to discover the brand itself.

• The core of the brand is the knowledge network that exists in people’s mind. Brand is a central node to which various other nodes tend to be connected with varying degrees of strengths.

• It is critical for marketers to fully understand the depth and breadth of awareness of the parent brand, and the strength , favorability and uniqueness of its associations.

• Exploring the brand involves seeking answers to the following questions both qualitatively and quantitatively:

• - What is a brand’s awareness level?• - What are its recall and recognition levels?

Contd……• - What are the different attributes associated with a brand?• - What benefit associations are connected with a brand?• - What are a brands personality associations?• - What are the symbols associated with the brand?• - What are a brands user associations?• - What is the perceived essence of the brand? • - What is the brands philosophy?

• 2. Identify Possible Extension Candidates • The objective is to identify product categories that might seem to fit with

the brand image in the minds of the customers.

Contd…..• 3. Evaluate the Potential of the Extension candidate to create equity. • This is done according to the three-factor model:• * Salience of parent brand associations• * Favorability of inferred extension associations• * Uniqueness of inferred extension associations • 4. Evaluate extension candidate feedback effects according to the four-

factor model:• * How compelling the extension evidence is• *How relevant the extension evidence is• * How consistent the extension evidence is• * How strong the extension evidence is

Contd…..• 5. Consider possible competitive advantages as perceived by consumers and

possible reactions initiated by competitors.• 6. Design marketing campaign to launch extension.• 7. Evaluate extension success and effects on parent brand equity.

• Conclusion: • Marketers have to tread a fine line between leveraging a brand through

extensions on the one hand and ensuring it does lead to brand dilution on the other.

• Extensions involve transfer of parent brand associations to the extensions. • The nature of the parent brand is a crucial determinant of extension success. • Hence, before embarking on an extension program, a brand’s extendibility

must be judged.